Arthur Lok Jack Graduate School of Business

Masters in Business Administration

Course: Operations and Productions Management
Case Analysis
Lecturer: Dr. Shaffick Hosein

Case Study
Instructions:
You are required to read, analyze and answer the following 5 (five) questions at the end of the
case.
Food Town is one of the premier grocery chains in Trinidad and Tobago, headquartered in Port
of Spain and operates over 70 stores nationwide. The company employs over 23,000 people, and
has annual sales of over $ 2 billion. Food town has a strong reputation for offering its customers
high product quality and excellent service. Through a combination of market research, trial and
error, and listening to its customers, Food Town has evolved into a very successful organization.
In fact, Food Town is so good at what it does that grocery chains all over the country send
representatives to Food Town for a firsthand look at operations.
Many of the companys stores are giant 100,000 square foot superstores, double or triple the size
of average supermarkets. A superstore typically employs from 300 to 400 people.
Individual stores differ somewhat in terms of actual size and some special features. Aside
from the features normally found in supermarkets, they generally have a large bakery Section
(Each store bakes its own bread, rolls, cakes, pies, and pastries), and extra large produce
sections. They also offer film processing a complete pharmacy, a card shop and video rentals.
In-store floral shops range in size up to 800 square feet of space, and offer a wide variety of
fresh-cut flowers, flower arrangements, varies and plants. In-store card shops covers over 1000
square feet of floor of floor space. The bulk foods department provides customers with the
opportunity to select what quantities they desire from a vast array of foodstuffs and some
nonfood items.
Each store is a little different. Among the special features in some stores is a dry cleaning
department, a wokery, and a salad bar. Some feature a Market Cafe that has different food
stations, each devoted to preparing and serving a certain type of food. For example, one station
have pizza and other Italian specialties, and another oriental food. There is also being a sandwich
bar, a salad bar and a dessert station. Customers often wander among stations as they decide
what to order. In several affluent locations, customers can stop in on their way home from work
and choose from a selection of freshly prepared dinner entrees. Some stores have a coffee shop
section with tables and chairs where shoppers can enjoy regular or specialty coffees and variety
of tempting pastries.
2

The company prides itself on fresh produce. Produce is replenished as often as 10 times a day.
The larger stores have produce sections that are four to five times the size of a produce section
of an average supermarket. Food Town offers locally grown produce a season. Food Town uses
a farm to market system whereby some local growers deliver their produce directly to
individual stores, bypassing the main warehouse. That reduces the companys inventory holding
costs and gets the produce into the stores as quickly as possible. Growers may use specially
designed containers that go right onto the store floor instead of large bins. This avoids the
bruising that often occurs when fruits and vegetables are transferred from bins to display shelves
and the need to devote labor to transfer the produce to shelves.
In addition to large display cases of both fresh and frozen meat products, many stores have a
full-service butcher shop that offers a variety of fresh meat products and where butchers are
available to provide customized cuts of meat for customers.
Each department handles its own ordering. Although sales records are available from records of
items scanned at the checkouts, they are not used directly for replenishing stock. Other factors,
such as pricing, special promotions, local circumstances must all be taken into account.
However, for seasonal periods, such as holidays, managers often check scanner records to learn
what past demand was during a comparable period.
The superstores typically receive one truckload of goods per day from the main warehouse.
During peak periods, a store may receive two truckloads from the main warehouse. The short
lead-time greatly reduce the length of the time an item might be out of stock, unless the main
warehouse is also out of stock.
The company exercises strict control over suppliers, insisting on product quality and on-time
deliveries.
The company recognizes the value of good employees. It typically invests an average of $7000
to train each new employee. In addition to learning about stores operations, new employees learn
the importance of good customer service and how to provide it. The employees are helpful,
cheerfully answering customer questions or handling complaints. Employees are motivated
through a combination of compensation, profit sharing, and benefits.
Quality and Customer satisfaction are utmost in the minds of Food Town management and its
employees. Private label food items as well as name brands are regularly evaluated in test

kitchens, along with the potential new products. Managers are responsible for checking
maintaining products and service quality in their departments. Moreover, employees are
encouraged to report problems to their managers. If a customer is dissatisfied with an item and
returns it, or even a portion of the item, the customer is offered a choice of a replacement or a
refund. If the item is a Food Town brand food item, it is then sent to the test kitchen to determine
the cause of the problem. If the cause can be determined, corrective action is taken.

Questions

1. Discuss how customers judge the quality of a supermarket? (20 marks)

2. State and explain how and why each of these factors is important to the successful operation of
a supermarket: (20 marks)

(a) Customer satisfaction

(b) Forecasting
(c) Capacity planning
(d) Location
(e) Inventory management
(f) Layout of the store
(g) Scheduling
(h) Kiosk
(I) Human resources
(j) Strategy

3) Explain how an individual branch of a large supermarket chain can:

a) Contribute directly to the strategic aims of the whole company (10 marks)
b) Help other parts of the company to contribute (10 marks)
4a) Discuss the use of SLOT SPACES at Food Town (20 marks)
5) Identify and discuss the recommendations you would make to improve Food Town
operational strategies? (20 marks)